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II-VI INCORPORATED ANNOUNCES SECOND QUARTER EARNINGS

         II-VI INCORPORATED ANNOUNCES SECOND QUARTER EARNINGS
    PITTSBURGH, Jan. 21 /PRNewswire/ -- II-VI Incorporated


(NASDAQ-NMS: IIVI) today reported results for the second fiscal quarter ended Dec. 31, 1991.
    Net earnings for the period were $206,000 ($0.08 per share) on revenues of $4,342,000.  These results compare with net earnings of $75,000 ($0.03 per share) on revenues of $3,426,000 in the second fiscal quarter last year.
    Bookings for the current period were $4,700,000 compared to $4,078,000 for the second quarter last year. The current $2.5 million manufacturing backlog, however, reflects a two-year low. Included in bookings is the receipt of a previously reported contract from the Defense Advanced Research Projects Agency (DARPA) to work with an industry team to improve Cadmium Telluride as a substrate material for infrared focal plane array manufacturing. This contract is expected to result in $1.1 million in revenues over the next 15 months. Certain contract options, if awarded, would result in additional revenues and could increase the length of the contract to approximatley three years. However, during the second quarter other defense-related orders for optics and infrared materials were significantly below last year's equivalent quarter and fiscal year-to-date levels.
    For the six months ended Dec. 31, 1991, II-VI reported net earnings of $473,000 ($0.18 per share) on revenues of $8,467,000. This compares to net earnings of $301,000 ($0.11 per share) on revenues of $7,054,000 for the same period a year ago.
    Sales increased as a result of higher carbon dioxide laser optics shipments. Optics production from the Singapore facility continued to increase. Gross margin percentage decreased primarily due to higher-than-expected expenses in infrared materials production partially offset by improved gross margins from Singapore and Saxonburg, Pa., optics shipments. The adverse impact of lower infrared material yields was greater than expected and is continuing. As a result, earnings were reduced for the quarter by approximately $0.08 per share and could be reduced to the same extent in the second half of fiscal 1992.
    The effect of staff reductions in prior quarters contributed to lower corporate overhead and internal research and development expenses. Net interest and other expenses were unfavorably affected by foreign exchange rates and domestic interest rate reductions on invested funds. A reduction in the estimated effective tax rate for the quarter contributed to increased net earnings.
    In discussing the results of the quarter, Carl J. Johnson, chairman and chief executive officer, stated, "To this point, fiscal year bookings have provided the opportunity to increase first half product shipments by 18 percent over last year. However, continued market uncertainty combined with our infrared materials production issues are expected to impact third quarter results and bookings. We expect military infrared optics and materials markets to improve later in the year. This, coupled with expected improved yields, should favorably impact margins after the third quarter."
    Headquartered in Saxonburg, II-VI Incorporated designs, manufactures and markets optical and electro-optical components and materials for precision use in infrared devices. The company's products are used in high-power lasers for industrial processing, lasers for surgery and other medical applications, and for military sensing systems.
                  II-VI INCORPORATED AND SUBSIDIARIES
            Consolidated Statements of Earnings (Unaudited)
                      ($000 except per share data)
    Period Ended                       Three Months     Six Months
    Dec. 31                            1991    1990    1991    1990
    Revenues
     Net sales                       $4,214  $3,416  $8,309  $7,020
     Contract research & development    128      10     158      34
                                      4,342   3,426   8,467   7,054
    Costs, expenses & other income:
     Cost of goods sold               2,808   2,091   5,319   4,057
     Contract research & development     96       9     121      33
     Internal research & development    120     223     256     406
     Selling, general & administrative
      expenses                        1,018     996   2,039   2,100
     Interest and other expense
      (income) - net                     60     (15)    109     (23)
                                      4,102   3,304   7,844   6,573
    Earnings before income taxes        240     122     623     481
    Income taxes                         34      47     150     180
    Net earnings                        206      75     473     301
    Earnings per share                $0.08   $0.03   $0.18   $0.11
    Average shares outstanding        2,644   2,638   2,636   2,635
    -0-                          1/21/92 R
    /CONTACT:  John M. Sherbin II, treasurer and chief financial officer of II-VI, 412-352-5250/
    (IIVI) CO:  II-VI Incorporated ST:  Pennsylvania IN:  ARO SU:  ERN 745 01-21-92 15:26 EST DM -- PG008 -- 2072 01/21/92 16:50 EST
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Date:Jan 21, 1992
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